Rare-earth mining rises again in United States

A company called Molycorp is reopening a mine in California.

With waste water eliminated, a sludge of unwanted residues will be left behind and gradually piled in this 90-acre pit at the base of Clark Mountain.

The fight over the minerals that run the electronic world entered a new phase in March when the United States, the European Union, and Japan collectively filed a case against China, accusing the rare-earth powerhouse of violating world trade rules to manipulate mineral prices.

At the heart of argument are 17 little-known elements with whimsical names like europium and praseodymium, that are found in everything from mobile phones and computers to smart bombs and large wind turbines. Traces of the metals can be found around the world, but rarely in high enough concentrations for mining to be convenient or profitable.

China now controls 95 percent of total rare-earth supply. A figurative sneeze on its export policy is all that’s needed to shake global markets, and in 2010 China began restricting rare-earth exports. International prices spiked, reaching near-dizzying levels last summer before crashing in the fall. In the wake of the World Trade Organization case, they’ve perked up again.

Foreign companies buying rare earths from China must now pay more than twice the rate paid by companies inside China. The tiered pricing encourages companies to move factories and jobs to China, where they can be sure of supply and lower prices. Beyond the extra economic boost for China, this has made it easier for Chinese companies to steal foreign intellectual property. Businessmen and politicians worry that China’s dominance over these 17 elements is a strategic vulnerability, discouraging innovation and threatening national defense.

A bread-roll-sized chunk of neodymium sells for about $300

That may soon change. Encouraged by rising prices and political support, new mines are starting up around the world, most notably in Malaysia and in California, where a company called Molycorp has reopened what until the 1980s was the world’s flagship rare-earth mine.

"In five years there will be rare earths produced all over the world and China will lose its edge," said mining analyst John Kaiser, editor of Kaiser Research Online. "Molycorp is part of that equation. They’re putting back into production what was once the largest rare-earth mine in the world. And this is a good thing because it takes away power concentrated in China."

Located in Mountain Pass, California, about an hour west of Las Vegas, the mine sits atop mineral deposits discovered in the late 1940s by geologists looking for commercial-grade uranium. They found some of the world’s richest reserves of bastnasite, a mineral containing higher-than-usual concentrations of rare-earth elements like cerium, lanthanum and yttrium.

Rare-earth mining began at Mountain Pass in the early 1950s, and by the mid-1980s the mine supplied 60 percent of global demand and 100 percent of U.S. needs. But as Chinese production increased, operations at Mountain Pass dwindled.

Environmental problems also played a role. Salty, radioactive water kept leaking from waste evaporation ponds, leading to the mine’s closure in 2002. Mining for rare earths is classically a very environmentally destructive process, and China’s market domination is due in part to disregard for health, safety and environmental controls. The country has recently started cleaning up its messiest mines, adding to export controls in pushing rare-earth prices up.

"They were cheap," Kaiser said, "because China was willing to subsidize the price by producing things with lower environmental and health and safety controls—all the things that we over here don’t allow."

Six years after the Mountain Pass closure, a group of private investors purchased the mine from Chevron. Molycorp is now giving the mine a $781 million overhaul, and claims it can be both profitable and environmentally responsible, operating without sucking the area dry of water, requiring massive electrical draws or leaving behind a toxic trail.

While those promises will be difficult to fulfill, one promising sign is Molycorp’s response to pressure from the Center for Biological Diversity, an environmental group that initially opposed renovation. Molycorp addressed their major concern: Rather than transporting waste water offsite through a potentially leaky pipeline, the company will recycle hydrochloric acid and water used in mining, eliminating the need for waste ponds and saving on chemical costs.

While the new technique’s details are proprietary, few doubt Molycorp’s method will genuinely be cleaner than the older extraction method.

"The mining regulations in California are probably the strictest in the world," said Navid Mojtabai of the New Mexico Institute of Mining & Technology. "If they’ve got the permits to operate then they’re already much cleaner than the Chinese."

As China deals with its own environmental concerns and legal complaints at the World Trade Organization, Molycorp has its own lawsuit to contend with. In February an investor filed a class-action lawsuit against Molycorp, claiming the company overstated demand for its products and its production capabilities.

While none of the lawyers contacted in connection with the case would comment, several analysts dismissed it. According to rare-earth industry analyst Judith Chegwidden, director of the Roskill Consulting Group, the market volatility of 2011 left rare-earth buyers wary, temporarily reducing demand in a way that’s frustrating to investors but not evidence of Molycorp malfeasance.

Meanwhile, Molycorp is ramping up production at Mountain Pass, and looks set to produce 40,000 tons annually by the end of 2013. As the mine begins cranking out neodymium, lanthanum and other materials by the ton, the strategic vulnerability that’s caused so much concern should be eased.

On May 10 Molycorp announced larger-than-expected profits for the year’s first business quarter. All of the the material Molycorp expects to produce in 2012 has already been spoken for, said Molycorp CEO Mark Smith. "Our customers need our product," he said. "We’re selling everything that we’re producing before it’s even out of the ground."

With waste water eliminated, a sludge of unwanted residues will be left behind and gradually piled in this 90-acre pit at the base of Clark Mountain.

Jim Merithew/Wired

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China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

It should be noted that the radioactive waste from rare earth consists almost entirely of alpha decayers like thorium that are nearly harmless to humans. I am glad to see the US get serious about mining our own rare earths and updating radiation laws to distinguish better between alpha, beta, and gamma radiation sources would go a long way to lowering the cost of domestic mines.

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

Then why not restrict it for everyone but state run needs? They seem to have no problem selling it as long as you move operations within their country. That's where the problem arises.

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

Then why not restrict it for everyone but state run needs? They seem to have no problem selling it as long as you move operations within their country. That's where the problem arises.

Let me know when the US does not take care of its own industries first. From forestry to corn to cotton to aerospace - showing the US a hypocrite as usual takes little effort.

Environmental problems also played a role. Salty, radioactive water kept leaking from waste evaporation ponds, leading to the mine’s closure in 2002. Mining for rare earths is classically a very environmentally destructive process, and China’s market domination is due in part to disregard for health, safety and environmental controls. The country has recently started cleaning up its messiest mines, adding to export controls in pushing rare-earth prices up.

That says it all right there. Same thing happens in the forestry industry. People don't want trees cut down, and regulations shoot through the roof in areas that are harvested. Consequently, US timber production either declines (in quantity or quality) and/or prices go up. Then in steps South American suppliers that just pillage the rain forest in a regulation-free nation, just to satisfy people's demands for hardwood floors and low maintenance decks. The guy at Lowes just buys what ever is cheapest, and in the end, the earth is worse off that where it started before we tried to "help." Green organizations would like to think they are improving things, but what do you do when international super powers just flip you the bird? We can't just say no to China anymore.

It should be noted that the radioactive waste from rare earth consists almost entirely of alpha decayers like thorium that are nearly harmless to humans. I am glad to see the US get serious about mining our own rare earths and updating radiation laws to distinguish better between alpha, beta, and gamma radiation sources would go a long way to lowering the cost of domestic mines.

Hopefully this raises awareness of radiation and its types. I wonder how many people know they themselves give off radiation. For at least the past 20 years it seems like radiation has been the predecessor of scare words like 'terrorist'.

Would be nice if we also concentrated on renewed recycling methods for these rare metals - if every component of an iphone was even just 1/4th recycled metal we would be much better off.

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

Then why not restrict it for everyone but state run needs? They seem to have no problem selling it as long as you move operations within their country. That's where the problem arises.

Let me know when the US does not take care of its own industries first. From forestry to corn to cotton to aerospace - showing the US a hypocrite as usual takes little effort.

Same in EU. Subsidies all over the place but when it's against us then it's oh so bad. Like Russia. Nobody had a care in the world while it was plundered. When Putin stopped that suddenly we care.Hard to be taken serious when you whine on others for exact same thing you are doing yourself.

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

By all reports, China is effectively subsidizing the domestic users of its minerals. Putting domestic use first is effectively a tariff, hence the lawsuits in the WTO, etc.

Thankfully this isn't the only REO project underway. A lot of damage has already been done though.

We should be careful what we wish for. Suppose the WTO suit succeeds? Then we get more Chinese neodymium that we wont need as Mountain Pass ramps up to build all the windturbines we think we want, only to discover that all the world's winds wont blow down the world's demand for coal, the only solutions for which are (a) find a cheaper substute or (b) just stop mining it.

There is no plan (a). Price of coal on China's east coast is rumored at ~$100/ton. Its mined in Wyoming at a tenth that. China thinks they can economically ship the stuff by rail to Oregon and from there by a slow boat home. What's to stop them?

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

By all reports, China is effectively subsidizing the domestic users of its minerals. Putting domestic use first is effectively a tariff, hence the lawsuits in the WTO, etc.

Thankfully this isn't the only REO project underway. A lot of damage has already been done though.

By all reports means what exactly? Subsidizing by not making domestic production available worldwide?

One might say it is unfair to promote national interest above others. America is not above everything from assassinations to paying and supporting death squads to funding foreign terrorists to supporting genocidal dictators to well pretty much anything "evil" one can think of to promote their national interests.

Keeping minerals to themselves because they feel this finite supply is best used for themselves seems like such a small thing.

It couldn't be more complicated than that, could it? Like 'people don't like clear-cutting', or 'people don't like the destruction of natural habitat', or even 'people would like our public lands better managed.'

MonkeyPaw wrote:

Green organizations would like to think they are improving things

No doubt were they as wise as you, they would realize that since they can't accomplish everything at once, there's no use fixing anything anywhere.

You know, we've had color TV since the early 60s. Why is your world still so Black & White?

China has pulled a fast one and the supposed WTO does nothing. How can it be fair for china to make all the high tech goods of the world just because they own 97% of the worlds supply of the metals neeeded to manufacture them. If the places where these so called rare elements exist California included, ramped up production, there would be more balance but the best we can hope for is a decision against them at the wto. We also need protection from a single country controlling all of anything because a trade monopoly is just another name for a scam.

China has pulled a fast one and the supposed WTO does nothing. How can it be fair for china to make all the high tech goods of the world just because they own 97% of the worlds supply of the metals neeeded to manufacture them.

Actually it's because they have all the cheap, skilled labor in addition to abundant resources. The whole reason why we shut down domestic extraction of Rare Earths is because China had so much and manpower to extract, process, and integrate the stuff into products is pennies on the dollar compared to US mining and manufacturing. Now that it's not so cheap, we're turning to our own domestic supplies again. Even with our safety and environmental regulations, China constricting supply means that ours will be cost competitive again. We let them have the Rare Earths monopoly because it was cheaper for us to do so.

" Encouraged by rising prices and political support, new mines are starting up around the world, most notably in Malaysia" - as a resident of Malaysia I beg your pardon but there is no support for Lynas in Malaysia except from the money grubbing politicians.

China has pulled a fast one and the supposed WTO does nothing. How can it be fair for china to make all the high tech goods of the world just because they own 97% of the worlds supply of the metals neeeded to manufacture them. If the places where these so called rare elements exist California included, ramped up production, there would be more balance but the best we can hope for is a decision against them at the wto. We also need protection from a single country controlling all of anything because a trade monopoly is just another name for a scam.

The WTO is a worthless organisation whose sole purpose is bullying smaller countries. They have no power against larger ones.

I hope this wakes the US upto the insanity of sending it's entire mass manufacturing industry abroad. This is absolutely a result of short term thinking by the US. They weren't conned. They predictably played into China's hands because thenChinese govt seems to have the amazing ability to make decisions while thinking beyond the next quarter.

I am among those who are concerned with environment damage caused by rare earth mining, so I am guilty. Doesn't harsh regulation of companies like Molycorp, coupled with full willingness to purchase goods made possible by mining not environmentally friendly elsewhere, sound *very* NIMBY?

China needs its resources for its own industry. They are not hoarding them for extortion purposes. They have their own domestic needs(state run companies, space industry, military hardware, etc.). US can dig for their own or improve their recycling efforts.

Then why not restrict it for everyone but state run needs? They seem to have no problem selling it as long as you move operations within their country. That's where the problem arises.

Let me know when the US does not take care of its own industries first. From forestry to corn to cotton to aerospace - showing the US a hypocrite as usual takes little effort.

Does the US artificially restrict its exports? Its one thing to take care of your industry its another to put artificial restrictions on others especially when you have a monopoly on the resources.

I am among those who are concerned with environment damage caused by rare earth mining, so I am guilty. Doesn't harsh regulation of companies like Molycorp, coupled with full willingness to purchase goods made possible by mining not environmentally friendly elsewhere, sound *very* NIMBY?

huh, yes. This isn't about China. This is about the rest of the world shutting down their mines and their overeliance on a single source. I read somewhere that the world's synthetic Vitamin C supply (ascorbic acid and sodium ascorbate) is mostly sourced from China. How clever is that?

Yes. Of course, that requires that the computers and other technical devices be submitted for recycling. In addition, if more devices are being produced than are being decommissioned, the result is a need for new resources for producing the new devices.

Several posters have asked this, so I'll address it. When people talk about China having 97% of the worlds supply of rare-earth metals, it is not a comparison between China's known reserves and the worlds, it is strictly talking about active mining. China mines 97% of the worlds rare-earth metals.

Rare-earths are actually quite common in the earths crust. They are deposited by meteorites. The trouble is they are very difficult to extract and separate because they occur in trace quantities in the ore and they are all chemically similar. The end result is tons of ore must be processed to produce pounds of metal, and that metal requires additional processing to separate out the different types (compared to other metals).

One extra hazard is thorium. Several posters have erroneously stated that thorium is harmless. While it is true that alpha radiation is easy to shield against (your skin is sufficient) it is extremely damaging when ingested or inhaled. The +4 charge an alpha particle has makes it highly reactive inside the body, causing large amounts of physical and chemical damage. That's why you want to keep thorium out of the environment. You certainly don't want it in your ground water.

The sad irony is Thorium is a potent reactor fuel but we don't invest in reactors that can use it. The Molten Salt reactor that was tested at The Oak Ridge National Laboratory promised to be an inherently safe and proliferation resistant design that would convert the Thorium that is currently waste into U233 and burn that. The Navy experiment with a Light Water Pressurized Thorium Breeder Reactor that successfully produced a surplus of fissionable U233. Politics signed the death warrant on Thorium fueled reactors in favor of current inherently unsafe U238/U235 fueled reactors and the Liquid Metal Fast Breeder which turned U238 into Plutonium which poses a proliferation risk.

The descendant of Oak Ridge's work is the Liquid Fluoride Thorium Reactor. It is being actively research, but a commercial reactor isn't expected for at least 20 years.

That said, this might be a place for the government to step in with some sort of assistance to encourage US production if it could become a national security risk.

Believe me, US DoD has been tracking strategic metals issues for at least 30 years. Also the projected population of skilled machinists / tool&die makers. I believe they periodically make public reports on strategic shortfalls. Nobody reads them.

Nit: alpha particle is He-4 nucleus and has +2 charge, not +4. But either way IronLenny is correct: you do not want to inhale or ingest an alpha emitter.

I think part of the problem is that the elements are cheaper if you produce/manufacture in China--and the associated industrial espionage that comes along with it. Additionally, I know there are an abundance of deposits around the US. There is one for instance at Taylor Mountain in Alaska (mostly Eu, Th, U, La and Ce). There's also a fair amount of Au in the area which could offset the productions costs of getting the REEs out.

"In five years there will be rare earths produced all over the world and China will lose its edge," said mining analyst John Kaiser

Is five years soon enough? Or will the Chinese be able to get what they want by that time (abusing a monopoly within a comparatively low-technology market to corner a related higher-technology, higher-profit market), and yet be able to barter off the WTO's puny attack dogs with a token gesture of "reversing" the changes that gave them this huge and permanent advantage?

I worked at Molycorp doing land reclamation after the 2002 closing. At the time it was not fully closed and there was still some activity. They had a number of large bags of earth which I was told were being taken to China for mineral extraction. Keep waiting for an explanation of this in one of the articles.(Incidentally I was also told that among the federal agencies that came down on Molycorp for the pollution release was some Maritime agency- sorry I don't remember specifics. Apparently the dry washes in the harsh desert area are considered navigable waterways)

It should be noted that the radioactive waste from rare earth consists almost entirely of alpha decayers like thorium that are nearly harmless to humans. I am glad to see the US get serious about mining our own rare earths and updating radiation laws to distinguish better between alpha, beta, and gamma radiation sources would go a long way to lowering the cost of domestic mines.

unless the alpha emitter is ingested? i thought then they could do some real damage